By Brendan Moore
The United States Senate passed the long-awaited Cash-For-Clunkers bill yesterday, sending it to President Barack Obama, who will probably sign it immediately. President Obama has fought hard to get the bill passed in Congress.
Champions of the bill are hoping it will spur auto sales, with the side benefit of reducing vehicle emissions. The auto industry is focusing on the stimulus to sales, and environmental groups are interested in the reduction of vehicle emissions.
Carl Levin, the Deomocratic senator from Michigan, and a staunch supporter of the domestic auto industry, stated, “This program will provide a much-needed boost to the struggling auto industry, including manufacturers, dealers, suppliers and other related industries.”
It also will “encourage consumers to purchase more fuel-efficient vehicles,” he said.
The program would kick off 30 days after the president signs it, and is limited to a total expenditure of $1 billion USD and expires October 1, no matter what else happens.
By Brendan Moore
A new auto manufacturer has decided to build their new environmentally-friendly car in a former GM plant in Monroe, Louisiana. The company, supported by the millions (billions?) of T. Boone Pickens and employing Tom Matano, the former head of design at Mazda, is expected to employ about 1400 workers at the plant.
Louisiana state and local parish (no counties in Louisiana) officials have assembled an incentive package worth about $67 million, which will expand and revamp the factory. Federal assistance will come in the form of the U.S. Commerce Department’s Economic Development Administration’s contribution of as much as $5 million for rail and infrastructure improvements. The new company also has applied for engineering and manufacturing loans under the Advanced Technology Vehicle Manufacturing Loan Program.
Odds and Ends about Cars and the Car Business
By Brendan Moore
BOB LUTZ says it could be decades before GM overcomes it’s “reputational deficit”. He says that GM has overcome it’s fuel economy and quality deficits, but it may takes several generations of models before the consumers trust the brand as much as other brands. Lutz recently joked about GM products of the 1970s, ’80s and ’90s as “brilliantly executed mediocrity.” He stated that his biggest hope is that his tenure as product development chief is “the whole organization understands there’s no such thing as good enough when it comes to product.” This is probably correct – I can’t tell you how many conversations I’ve had about GM with regular citizens that quickly veer off into their story of a Pontiac or Buick that was manufactured in Hell, and never would run right, no matter what the Mr. Goodwrench boys did. They’re not interested in GM’s new product; they’re still suffering from the stings of previous ownership of a 1986 Pontiac 6000 LE.
QATAR, the oil-rich country in the Mid East, will decide in the next three weeks whether they want to invest in Porsche, says their prime minister. “We are still discussing the stake. According to the legal agreement between the two parties, neither of them is allowed to disclose any information about it before it is sealed,” the Gulf Times quoted Sheikh Hamad bin Jassem al-Thani as saying. Porsche racked up a $12.5 billion USD debt in their failed effort to take over Volkswagen. VW essentially told Porsche to get lost because Porsche already had too much debt when they started the takeover process. Qatar’s proposed stake in Porsche is assumed to be around 25%. For those of you that are unaware of the Arab States’ reach into the German auto manufacturer sector, Abu Dhabi’s investment entity, bought a 9.1% stake in Daimler in March, which makes it the largest shareholder. The second-largest shareholder is Kuwait.
By Brendan Moore
The badly-kept secret in Sweden this week has been the rumor that GM is selling Saab to Koenigsegg, a small Swedish manufacturer of supercars. The rumor reached the rest of the world yesterday, and the current chatter is that his deal will be announced today.
GM took the step yesterday of stating that Koenigsegg is the preferred bidder for Saab.
“Unidentified sources” say that GM picked Koenigsegg to buy the insolvent Saab because the company is both Swedish and an actual auto manufacturer, even if their production volumes are small.
How small? Well, in 2007, they had a production capacity of around 15 units a year. No, I didn’t leave out a number. In 2008, their production capacity was reportedly increased by 100%, up to 30 units a year. Koenigsegg makes high-strung, high-horsepower (as much as 800 hp), 200 mph+ supercars, a product category dramatically different than the one Saab inhabits currently.
Koenigsegg has also had some financial issues in the recent past. It’s worth pointing that Fiat did as well, almost declaring bankruptcy not so long ago, and now they own Chrysler.
There is an actual Koenigsegg, and that is Christian Von Koenigsegg, the young and very wealthy owner, and, CEO of Koenigsberg.
It is thought that GM is offering Koenigsegg a “lease-to-own” type of financial arrangement, that is, Koenigsegg gets Saab with very little money up front, and then pays GM back the purchase price as Saab is successful. GM is going to provide $500 million in assets and cash, production equipment for a new Saab model as well as $150 million of cash already in Saab’s account.
The other two bidders on the short list for Saab are two investment groups from the US. Neither group has automotive experience.
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By Brendan Moore
In a surprising move, China’s quality inspection agency has banned all Renault imports into China, citing unexplained “serious safety risks” and failure to meet technical standards. The models banned have all passed Europe’s stringent emission standards as well as getting the
highest score possible in the crash tests conducted by the independent European crash test agency EuroNCAP.
Renault executives said they were “surprised” by the decision from the General Administration of Quality Supervision Inspection and Quarantine (AQSIQ) in China. One can imagine that is a considerable understatement.
The Renault models, all built in Western production plants, are:
The statement from AQSIQ said, “In recent import inspections, we have repeatedly found batches of passenger vehicles made by the French Renault … do not conform with our country’s mandatory standards and relevant technical regulations, and there are serious safety risks.”
No, really. It actually happened yesterday.